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Banking Mess Hitting Cyprus Unlikely In U.S

Publication Date: 
March 20, 2013
Source: 
San Francisco Chronicle
Author: 
Kathleen Pender

Professor Emeritus Ken Scott spoke with the San Francisco Chronicle's Kathleen Pender about the Cyprus banking mess and how he believes the finance ministers of the euorzone "have opened up a new can of worms." 

The Cypriot government's willingness to impose losses on insured as well as uninsured bank deposits highlights the fact that deposit insurance is only as good as the government standing behind it.

"It reinforces the point - you have no contractual guarantee in the United States or anywhere else," says independent banking analyst Bert Ely.

...

Ken Scott, a professor emeritus at Stanford Law School, says, "I do think the finance ministers of the eurozone have opened up a new can of worms, but I don't believe we are in that can, certainly not yet."